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GROWTH - A MEASURE OF ACCEPTANCE The local service group last year flew more than 1 million ton miles of mail, 955,000 ton miles of express and 1,179,000 ton miles of freight. A total of 40,147,000 ton miles of traffic (including passengers) was flown on planes operating more than 45 million plane miles. The local service group has had a record of growth which indicates vitality. It compares favorably with the growth of the trunk carriers. Yearly local service passenger revenues have increased 215% since 1949, while the trunk line passenger revenues have grown 107% in the same period. Local service also has grown faster than the trunk lines did in the late 1930s, when these carriers were in a development phase somewhat comparable to that of the local service group since 1949. (Exhibit B) The growth is due to expansion of routes by the CAB in response to public demand for service, as well as to increases in traffic. It is important to note that there were wide variations from the average experience. OPERATING CHARACTERISTICS The local service carriers generally operate routes which have low traffic density, and the average distance travelled per passenger is far below that of the trunk lines. In 1953 local service passengers travelled an average of about 192 miles compared with about 537 miles for the trunk line passengers. It is axiomatic in any form of transportation of expense to revenues becomes less favorable as average revenue hauls decrease in length. It costs approximately the same amount to sell the passenger his ticket, handle his baggage, solicit his patronage and do the bookkeeping for his flight, whether he travels 193 miles or 1,930. But the revenue for the shorter flight (pre-tax) is only about 1/10th of the revenue for the longer flight. In addition, where stops are frequent and much time is necessarily spent in traffic patterns and taxing on the ground, fuel consumption is higher, and wear and tear on engines, landing gears and tires is increased, all resulting in higher hourly maintenance costs than for the long hauls. 9